All Forum Posts by: Alex Thomsen

Thank you all for your weigh in on this deal. It is really wonderful to have such a great community to discuss these things with. I am going with my gut feeling on this one and walking away from the deal. The deal is just too odd and risky to pursue for me. 

Quote from @Lydia S.:

When you say that the seller is being pushy, does that mean you’re dealing directly with the builder’s sales representative?  What’s your contract say about earnest money and why didn’t you consider your own representation by a Realtor?

The contract should have outlined the amount of earnest money you deliver.

I actually have a buyers agent representing me, but still everything needs to be done ASAP and the sales rep is trying to push him aside and communicate directly with me. I don't mind that so much and understand that she is just trying to sell the house. My issue is more with the amount of the earnest money deposit, which also is outlined in the contract. In the contract it states that the this deposit is nonrefundable, but I haven't signed anything yet. When I asked my agent about all this he just said that builders do things differently - however, there is still something that seems off to me. For example, if their lender drags things out and ends up offering mortgage conditions that are wildly different than what we have discussed then I would be forced to accept those conditions or lose $50k.

I have also asked if they could lower their earnest money deposit demand to something more reasonable, which they have refused. I just do not see any rational/benign reason for them charging so much in deposit up front considering that the house has not sold for 6+ months and I will be able to close relatively fast.

Quote from @Jason Wray:

Alex,

There is never a need to put that much money in earnest its usually because the seller or the builder is in a bind and need to quickly settle their debts or pay their vendors. You as the buyer also have rights under fair lending and you should never be forced to use a builders lender. 90% of the time lenders drop the ball and end up not being able to close on time or their overlays cost the buyer the deal and in some cases earnest money.

I would walk away from a deal that forces you to put $50K in earnest and use some generic lender who may not even be able to close the deal. Sounds like they have a back door deal where the lender or loan officer and builder or realtor all benefit from using each other (which is illegal).

Keep in mind its end of year pretty much every seller and builder is offering a 2% seller credit its the norm.

$50K in earnest is a lot and if the lender drops the ball are you positive they can get the credit denial out in time to refund the earnest? Charlotte is loaded with inventory are you sure this new build at Max cost is worth the headache versus a home selling for less that you can renovate yourself and increase the ARV?

Thanks Jason, this is really great input. I was also thinking something along those lines, but I am glad to know that you also think that $50k in earnest money deposit is excessive. I actually just sold an older property because there were too many repairs, so I was hoping to find something more hands off as I am an out of state investor.

Hi BP community,

I have a situation, which seems a bit odd, and I would be grateful for any insights. I am looking for single family investment/rental properties in Charlotte NC and my agent found a new construction, which is already completed. We negotiated the price down a bit from $350k to $340k and the construction company is committed to pay 2% of seller's paid costs as incentives if I use their preferred lender. So far everything seems reasonable. However, dealing with the seller is a bit of a mess - she is extremely pushy and want me to place a $50k earnest money deposit ASAP. I am having a hard time understanding why I would need to pay $50k earnest money deposit when the house is already completed and I can close fast. I know that earnest money deposit is given as an indication of being serious but I just feel that $50k is a bit outrageous. I am getting nervous over potential issues with the house or the loan options, and the prospect of either being pushed into a bad deal or losing $50k in a nano second. Therefore, I wonder if an earnest money deposit of $50k is normal for a newly built single family house? 

1. How about DreamDwell Realty, UrbanNest Properties, PrimeSpace Estates, LuxeHaven Realty, SkylineScape Homes, StellarVue Properties, PrestigePeak Estates, MetroGlobe Realty, EliteHomes Network, or HorizonHarbor Properties?

Quote from @Scooter Williams:

Have you consider managing yourself? I manage 100+ units and live near Charlotte. You are welcome to join me for one of my field days if you want to learn more. 

Thanks for the offer. However, I live in NY which makes it difficult to manage by myself even though I travel to NC quite often.  

Quote from @Sally Fairchild:

@Alex Thomsen

Been there. So......if this is as good as it gets, is it good enough? Because this is as good as it is going to get.

I'd call the PMC and tell them I want another PM. They don't do it, I look for another company. If they do, I'd give the new one a chance. If I continued to be unhappy, I'd start looking for a new company and move on.

I've spent a lot of time smoking hopeium (hoping it gets better) and it usually doesn't get better and I'm always pissed off. I don't want to go thru life always pissed off so I cut my losses and move on.

@Sally Fairchild thank you so much for your response. I 100% agree on not wanting to go through life angry. I will see if I can solve the problem with the company and if not move on.

Quote from @Evans Wright:

Quote from @Alex Thomsen:

@John Underwood Thank you so much for your suggestions. The manager has the property listed on Zillow (and many other similar sites) and I can see that it has quite a bit of interest there, which makes me wonder why she can't rent it out. Once in a while she tells me about a non-qualified application when I ask so I guess we are getting some applications. However, she is not doing any open houses as far as I know - is this normal for a rental?

I just reached out to the previous manager, so lets see what he says.

Your turn around seems really great - do you happen to know a property management company in Charlotte NC that can deliver similar results? That would really be great.

 Alex, if you need an LTR property manager in CLT then please reach out to @Maranda Tucker. She has a lot of experience in the game and is doing amazing things when it comes to bringing PM companies up to higher standards. 

If you need an STR/MTR PM, hit up @Anne Sargeant. She is great at helping investors understand angles that are not easily seen when it comes to the potential of an asset and has superhost status. Having a superhost PM can help increase your bookings by a significant amount. BP podcast episode 712 does a good job explaining the benefits of having a superhost PM so check it out.

Thank you for these referrals. Much appreciated🙏

@Richard F. Thank you for your input. I definitely can see your point and I think the time of the year is why I am waiting 3 months until seriously worrying about the PM and asking more experienced investors about their advice.

I get your concerns and I would say that I am usually the person who want the rental rate to be lower than my PM in the hope that we will find tenants faster and at better quality etc. Right now, the rent is the cheapest of the neighborhood and other houses that were higher priced were recently rented out. Therefore, I am starting to lose my patience a bit...

@Eliott Elias I have talked to my PM on several occasions, but she is defensive and comes up with excuses. Some of the excuses seem reasonable, but then at the same time, I feel that there is no good excuse for the house not being rented out after 3 months.